Types of Credit Cards and Choosing One
Almost everyone over the age of consent (18 or 21) has or wants a credit card nowadays and they are accepted in almost every establishment. There are three main sorts of credit card common in America. The first main kind of credit card is travel and entertainment cards such as American Express or Diners Card. These have to be paid completely at the end of the month and are generous on spending limits.
The second major kind of credit card is the bank card such as Visa, Master Cards, GM, and Ford cards distributed mainly by the banks. The bank defines the spending limit, which in bank parlance, is known as the credit line and each bank offers different terms and conditions. Banks offer a choice of payment methods: you may either pay the balance in full with no interest charges or pay the minimum or some part of the balance with an interest.
The other major sort of card is the retail store card, such as Sears, J.C. Penney, Shell or Mobil. These store cards and those issued by gas companies, which are usually known as fuel cards, are only accepted in specific countries. They hardly ever carry annual charges. There is a large variance in the terms and conditions for these cards.
Different types of credit cards offer different options. Some are designed for individual consumers, while others are set up in ways that work best for small business needs. To know what sort of credit card fits your needs, you should review a few options.
How to Select your Credit Card.
Credit cards are a part of everyday life for most people living in the west. It’s becoming increasingly impossible to avoid them, especially for business men. So, if it is the first time you are thinking of entering into the world of plastic money, here are some of the basic things you should look out for.
First, compare the interest charged by all the credit cards you are interested in. While the rate may not remain fixed for ever, it’s always best for beginners to go for the one charging the lowest rates.
Make sure you study the fine print carefully, especially with regard to the other charges that can be applied, like late-payment fees, annual fees, and whether there is a grace period, which is normally given before the finance charges are applied.
Decide what spending limit is most appropriate for a person of your income. Also the fewer credit cards you have, the better placed you are to track your spending.
Compare the services and other features such as the cash back incentives, or warranties, rebates and the like. Check whether the card is widely enough accepted to cater for your needs.
You will help yourself by acquainting yourself with the following terms: 1] Annual Percentage Rate: this is the yearly cost of the credit. 2] Finance Charges: these are the total charges of the transaction. 3] Period of Grace: This is the period of time the card issuer allows you before they begin charging you interest on new purchases. (NB: not all credit card issuers allow a grace period).
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